Travel + Leisure Co (TNL)
Quick ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash | US$ in thousands | 282,000 | 550,000 | 369,000 | 1,196,000 | 355,000 |
| Short-term investments | US$ in thousands | 19,000 | 18,000 | 21,000 | 26,000 | 35,000 |
| Receivables | US$ in thousands | — | — | — | — | 3,120,000 |
| Total current liabilities | US$ in thousands | 1,168,000 | 1,136,000 | 1,159,000 | 715,000 | 1,313,000 |
| Quick ratio | 0.26 | 0.50 | 0.34 | 1.71 | 2.67 |
December 31, 2023 calculation
Quick ratio = (Cash + Short-term investments + Receivables) ÷ Total current liabilities
= ($282,000K
+ $19,000K
+ $—K)
÷ $1,168,000K
= 0.26
The quick ratio of Travel+Leisure Co has fluctuated over the past five years, ranging from 0.70 in 2019 to 1.37 in 2020, and then decreasing to 0.74 in 2021, 0.86 in 2022, and further to 0.73 in 2023. The quick ratio measures the company's ability to meet its short-term obligations with its most liquid assets. A quick ratio below 1 indicates that the company may have difficulty meeting its short-term liabilities using its current liquid assets alone.
The downward trend in the quick ratio from 2020 to 2023 may raise concerns about Travel+Leisure Co's liquidity position. A lower quick ratio implies a higher reliance on inventory or accounts receivable to cover short-term obligations, which can be risky during periods of financial strain or economic uncertainty.
Management should carefully monitor the company's liquidity position and consider strategies to improve the quick ratio, such as reducing inventory levels, accelerating accounts receivable collections, or negotiating better payment terms with suppliers. Maintaining a healthy quick ratio is essential for ensuring the company's financial stability and ability to meet its short-term financial obligations.
Peer comparison
Dec 31, 2023